Three cryptocurrency venture capital firms subpoenaed by SEC as crackdown intensifies
The US Securities and Exchange Commission has issued subpoenas to three crypto venture capital firms this year, according to a source familiar with the investigation. The first page of one subpoena, titled “in the matter of certain crypto asset offering intermediaries,” was viewed by DL News. The SEC is investigating potential violations of federal securities laws related to these firms.
The subpoenas sent to the crypto VCs requested documents relating to any token deals they have been involved in. While the SEC has not disclosed the specific targets of the investigation, it is clear that the agency is now focusing on the investors who provide initial funding to crypto startups.
The SEC’s scrutiny of crypto VCs indicates a widening crackdown on the digital assets industry. This investigation comes after the agency targeted influencers, projects, and exchanges like Binance and Coinbase. The SEC is also looking into whether crypto VCs may be acting as statutory underwriters, buying securities with the intent to distribute them to the public.
It is speculated that the SEC’s interest in crypto VCs stems from concerns about the distribution of unregistered securities to retail markets. This could potentially impact the initial issuance of tokens by startups and raise questions about compliance with securities regulations.
Elisha Kobre, a securities attorney, emphasized that the SEC’s investigation of crypto VCs is a natural extension of its enforcement efforts. This ongoing scrutiny highlights the agency’s commitment to regulating the rapidly evolving crypto industry.
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